The U.S. Internal Review Service (IRS) recently released IRS Notice 2023-59, which specifies requirements for U.S. taxpayers to claim the “Energy Efficient Home Improvement Credit” under section 25C of the U.S. tax code for home energy audits. The Notice, “Guidance on Requirements for Home Energy Audits for Purposes of the Energy Efficient Home Improvement Credit under Section 25C”, builds upon guidance issued in December 2022 by the IRS and Treasury Department in a Fact Sheet (FS-2022-40), which addresses “frequently asked questions about energy-efficient home improvements and residential clean energy property credits.” According to the IRS: “The section 25C Energy Efficient Home Improvement Credit, which was first passed in section 1333(a) of the Energy Policy Act of 2005 and amended by section 13301 of the Inflation Reduction Act of 2022 (IRA), provides taxpayers with financial incentives that make home energy upgrades more affordable and effective. The IRA amendments expanded the types of expenditures eligible for section 25C to include home energy audits, which credits 30% of the cost for a home energy audit up to $150 per year. Taxpayers must follow the requirements set forth in IRS Notice 2023-59, which include: • The guidance described in IRS Notice (2023-59) applies to home energy audits conducted after December 31, 2023. The IRS will provide the public an opportunity to review and comment on this subject when regulations are proposed. • Home energy audits must, among other requirements, be conducted or supervised by “Qualified Home Energy Auditors.” • Home energy audits that meet the criteria in section 25C and are conducted after December 31, 2022, and before or on December 31, 2023, do not require the home energy auditor to be a Qualified Home Energy Auditor as listed (https://www.energy.gov/eere/buildings/us-department-energy-recognized-home-energy-auditor-qualified-certification-programs ). • As described in section 3.02 of the Notice, the home energy audit must: (1) identify the most significant and cost-effective energy efficiency improvements and (2) be conducted and prepared by a Qualified Home Energy Auditor or under the supervision of a Qualified Home Energy Auditor, (3) the written report is prepared and signed by a Qualified Home Energy Auditor, and (4) the audit aligns with the most recent Department of Energy (DOE)-led and industry-validated Jobs Task Analysis. • Per section 4.02 of the Notice, the Qualified Home Energy Auditor must identify their certification on the written report to the household. Certified RESNET® HERS® are specifically recognized by the U.S. Department of Energy to conduct the energy audits for the tax credit between January 1 and December 31, 2023. To view the IRS notice, click on Notice 2023-59, Guidance on Requirements for Home Energy Audits for Purposes of the Energy Efficient Home Improvement Credit under Section 25C (irs.gov)
